Why didn’t the price of that great house fall?

Stabilizing nondistressed home prices, a declining shadow inventory and stronger foreclosure auctions should lead to lower distressed sales and less downward pressure on prices, according to CoreLogic.

The report notes that while mortgage performance is improving, it is not improving nearly as much as other consumer debt performance.

Despite, a bit of positive news in the report, CoreLogic notes that negative equity will remain a strong influence on the market for an extended period of time.

In May 2011, the “excluding distressed sales” home price index only dropped 0.4% from a year ago, compared to a decline of 7.4% for the all transactions HPI.

“Another very positive sign is that even while including distressed sales, the HPI increased between March and April — the first time in more than six months — and was up again between April and May. These increases represent the resumption of seasonality in home prices and are a positive sign for the market.”
…
Price discounts on distressed sales remain high, however, a major impediment to price stabilization, but the good news is that new auction filings have been down significantly since October 2010.

Residential shadow inventory — the estimated number of pending supply of distressed properties — declined to 1.7 million units in April 2011, down from 1.9 million units a year ago and down nearly 20% from its peak.

“Given that the recent declines in auction filings and current shadow inventory levels are the drivers of future distressed sales, the level of distressed sales should, all things equal, begin to decline late in 2011 and into 2012,” the report said.
…
“Going forward, negative equity will primarily decline by a combination of foreclosures, amortization and, to a lesser extent, price increases,” the report said. “While price declines have been a large driver of negative equity, price improvements will most likely not be the antidote anytime soon. …”While the worst is over, it means many of these borrowers will be upside down for an extended period of time, which will result in a long tail of mortgage distress.”

143 Responses to Why didn’t the price of that great house fall?

As we edge ever closer to D-Day (default day, debt ceiling day, however you choose to see next Tuesday, August 2nd), those of us who live and breathe the housing market are trying to figure out what this will mean to mortgage interest rates.

They are currently bouncing around historic lows and have been for some time. Refinances are surging, as the seven people left who haven’t yet refied are scrambling to do so.

But are we all worried over nothing?

“The debt crisis is probably the biggest factor hanging over mortgage rates at the moment,” says Guy Cecala of Inside Mortgage Finance. “Once investors feel there is any uncertainty about the U.S. government’s ability to guaranty its debt, Treasury rates and mortgage rates will start to rise – probably by at least 25-50 basis points.”

That’s the clearest answer I’ve gotten from the many experts we’ve had discussing this on CNBC today. Most just say, “We can’t know.” I’ve been arguing that the debt crisis is not as big a deal as the scheduled drop in the conforming loan limits at Fannie Mae, Freddie Mac and the FHA. Experts say the change from the $729,750 limit in the highest priced markets to $625,000 and the drop back to $417,000 in lower-priced markets will really only affect 5 percent of homes nationally, but the percentage is far higher in certain local markets.

“But some FHA borrowers will be pushed towards the Fannie/Freddie market and higher down payments since the FHA loan limits don’t bottom out at $417k (like the GSE limits do),” reminds Cecala.

While we all worry about what that lowest rate can be and where, the fact is that while the “average rate” on the 30-year fixed is very low, today’s buyers are not all eligible, especially as those rates require big down payments and super-clean credit.

“Those people are not qualifying for the super low rates now, and 30 percent of our sales now are to cash buyers, investors and foreigners, anyway,” notes Shari Olefson of Fowler, White, Boggs, who argues we’re missing the point.

“The bigger issue with those rates, other than housing and the crisis, is going to be the adjustable rate mortgages. If the rates go up, we are absolutely going to be seeing more defaults and more foreclosures as a result of those adjustable rate mortgages.”

Thirteen North Jersey branches of the U.S. Postal Service are being considered for permanent closure, officials said Tuesday. The branches, which range from an annex in Englewood to a much larger location in Clifton, will have their ultimate fates decided over the next several months.

The Postal Service has suffered financially for several years and Tuesday’s announcement is the latest effort by the agency to cut costs nationwide. Customers have increasingly used email to communicate, and advertisers, hit hard by the recession, have cut back on mailings. The agency lost $8 billion last year.
…
“It’s no secret that the Postal Service is looking to change the way we do a lot of things,” Postmaster General Patrick Donahoe said. “We do feel that we are still relevant to the American public and the economy, but we have to make some tough choices.”

Locally, that means that post offices in Clifton, Paterson, Carlstadt, East Rutherford, Englewood, Hasbrouck Heights, Fair Lawn, Wallington, Wood-Ridge, and North Bergen could potentially be on the chopping block. Nationwide, the Postal Service has placed 3,653 local offices on a study for list for potential closure, which is more than 1 in 10 of its retail outlets.

3b (#157 from yesterday): My DH used to commute to NYC from WT. The easiest way to do it is from the Ridgewood Park and Ride on Route 17. There are only like 2 stops along Route 17 after getting on, and you’re into the city inside of an hour. Getting home, of course, can be dicey. You can get monthly parking passes and 10-trip bus tickets at the office at the Park and Ride…or if you prefer you can feed quarters into a meter. You might want to take a run over there just to check it out and get the details.

There’s a Park & Ride in Paramus near Paramus Park Mall, but parking is limited and I have no idea how that works. I suspect a lot of people park at the mall and walk to the bus stop from there, as I see people walking up From Road towards Ridgewood Avenue every day.

It seems to me I’ve seen this house in foreclosure listings in the past. Outside condition doesn’t seem too bad, except it needs a powerwashing badly. No idea what it’s like on the inside, but it might be worth checking out, especially if you could manage to snag it for under $300k. It’s a dead end street so nut much traffic. It’s only 1 bath so my guess is it’s not dormered in the back.

#9 JC Thanks for the information> I don’t think I can do the bus thing; I am a train guy. I was wondering about the drive to Westwood or Emerson. That house with only 1 bath would not work, but somebody getting it for under 300K and who wants to do the work, it would be a good deal. I did the house rehab once, back in the day. Too lazy and tired to have to go through that again

From the annals of People Suck: Dining at a sidewalk table last night at a sushi place on 63rd and Broadway. Have my iPhone out like a good little employee because I am waiting for an email from the colleagues I am meeting in Delaware today. Guy walks by, raps on the table, swipes phone and runs. My gallant dining companion attempts to run after the SOB to get it back but is unable to catch the guy. Joke is on the SOB. Phone has big crack on the front glass (thanks to Lil Gator) which will need to be replaced for it to have any street value. And my IT department wiped it remotely right away so they will not be able to play Lil Gator’s NBA Jam or Stack the States apps.

So I will get a brand spanking new phone out of it, but am stuck without easy email access while in Delaware and when I report for Grand Jury selection tomorrow.

The grand finale to the evening was getting drenched while watching “All’s Well That Ends Well” at the Delacourte. After a rain delay, the show went on. One of the better productions that I’ve seen. I highly recommend it, if you have the chance to see it before it closes.

Yep, Dallas is toasty and dry this year – we have not had the pleasure of a 108 degree day yet, but its quite a shock to see forecasts in the triple digits all week long… I knew it would be hot moving here last year, but we are only supposed to average 16 days a year over 100 and so far we are at 25 with August still to go. But the upside is that I didn’t have to deal with the NJ snows this past winter and don’t have a state income tax, so what is a little heat…

From the annals of People Suck: Dining at a sidewalk table last night at a sushi place on 63rd and Broadway. Have my iPhone out like a good little employee because I am waiting for an email from the colleagues I am meeting in Delaware today. Guy walks by, raps on the table, swipes phone and runs. My gallant dining companion attempts to run after the SOB to get it back but is unable to catch the guy. Joke is on the SOB. Phone has big crack on the front glass (thanks to Lil Gator) which will need to be replaced for it to have any street value. And my IT department wiped it remotely right away so they will not be able to play Lil Gator’s NBA Jam or Stack the States apps.

So I will get a brand spanking new phone out of it, but am stuck without easy email access while in Delaware and when I report for Grand Jury selection tomorrow.

The grand finale to the evening was getting drenched while watching “All’s Well That Ends Well” at the Delacourte. After a rain delay, the show went on. One of the better productions that I’ve seen. I highly recommend it, if you have the chance to see it before it closes.

re: #14 – “unable to catch the guy” Did your gallant dining companion NOT grow up in NYC during the 70s and 80s? That is where we are headed it seems. Anyone with street smarts would not chance an encounter with one of these snatch and grab junkies. Anyone desperate enough to swipe phone that has a street value of 50 dollars right in front of you most likely will be carrying and will to jab a knife into your side when confronted. Tell your gallant out of shape dining companion to hit the treadmill and be prepared to open a can of whoop ass preferably with a weapon that will incapacitate a junkie. Too bad NY State makes most defensive weapons like brass knuckles and extend-able batons a criminal possession of a weapon in the fourth degree same as carrying a large knife, people are going to need to know how to defend themselves again.

3b #12: Your best bet for train is to get the parking pass from Hillsdale. Yes, you’d be backtracking a bit but at least Hillsdale has a parking lot. Alternatively, your best bet is Westwood, walking distance to town. Look at the streets off Washington Avenue to the east of town, also the Roosevelt/Lexington Avenue area east of KKR. Mostly “charming older homes” and capes on 50′ wide deep lots.

#21 JC Thanks. Westwood is too noisy and crowded for me. The Hillsdale thing is doable. I want to avoid Hillsdale, as they are having a funding battle with the regional school system as well; don’t need all that nonsense. Perhaps I may look at Park Ridge as well. I would imagine the drive from WT to Hillsdale is probably around 10 minutes to the train.

Anyone have any good sites with images for designing a very functional hotel-like master bathroom? I have found lots of sites with tiny little pix that label what tile, shower attachments, vanities, materials are being used and I have found sites with large photos but no listing of the elements used. There has to be something better out there. I am going for a design that will make the bathroom feel like you are on vacation at a luxury hotel/spa but that is also very functional (e.g. storage) so it can’t be too contemporary cause this might be beautiful, but where are you going to put all your cr*p? http://www.us.kohler.com/articlescs/1139337701750.html

“I am going for a design that will make the bathroom feel like you are on vacation at a luxury hotel/spa”

I am old school. I don’t fantasize about vacation when I’m in the bathrooom. I use it simply to sh#t, shower, and shave. If I want to go on vacation, I hop on a plane and go to the Southampton Princess.

My rules of engagement for New Year’s eve in timesquare while in HS was as follows.

Don’t dress nice
Don’t make eye contact
Dont bring anything valuable
Wear running shoes
Bring a weapon
Be aware at all times
Always know who gangleader is
Never every end up on the ground
Stick and run.

That night we got to use every rule when cornered by a gang of 20 that was wilding and wow stupid guy in a tux was getting the snot kicked out of him as they were rolling him, dope was on ground, which left him open to be kicked by 20 people while his pockets were emptied and he wife was open to be raped. He got it in the face a few times with a boot, even better were like four other couples already down. Dopes went to a new years theater show and when it let out they walked into a full blow wilding pack, easy pickings.

Anyhow gang caught up to us. Brother followed rules, could not outrun them or over power them, so know who gangleader is, gangleader made mistake of thinking a 14 and 16 year old no problem and stepped first. Brother had switch blade out in a minute right next to his stomach. Guy was screwed, was like its cool it is cool and had gang back up. Then it was off to the races 20 blocks to Penn, I was on track team and brother basketball team, once we backed them off enough we were cool, funny ten blocks into run realized no one was chasing. Guess since we were broke, fast and dangerous they rather snatch stuff from Jersey folks. When ask Bro were you going to stick him, he was like I looked him in eye and thought going to shove it in deep, twist it and yank it out and then take off, the gang would be confused for a moment as they had no leadership, at that point it was as if gangleader sensed what was coming and was like no way, those pushbotton switchblades are sharp razor both sides and no way to grab it. If guy had gun it was too close to get it out. I bet that guy got teased that night, better than a seven inch blade in your stomach I guess. NY in the 1970s was way cool. Also teenagers after a few colt 45’s have some courage, heck I was holding my 42 ounce colt 45 by the neck and he also was going to get that over the head with the knife. I was all ready to go big time Bernie Goetz. Today I would be a nancy boy like NJ Gator and sit on my tampon cross legged while the mean man takes my toy away

Juice Box says:
July 27, 2011 at 10:24 am

re: #14 – “unable to catch the guy” Did your gallant dining companion NOT grow up in NYC during the 70s and 80s? That is where we are headed it seems. Anyone with street smarts would not chance an encounter with one of these snatch and grab junkies. Anyone desperate enough to swipe phone that has a street value of 50 dollars right in front of you most likely will be carrying and will to jab a knife into your side when confronted. Tell your gallant out of shape dining companion to hit the treadmill and be prepared to open a can of whoop ass preferably with a weapon that will incapacitate a junkie. Too bad NY State makes most defensive weapons like brass knuckles and extend-able batons a criminal possession of a weapon in the fourth degree same as carrying a large knife, people are going to need to know how to defend themselves again.

It doesn’t matter what post office I go to. All the way from New Jersey to Hawaii. Same story, different place. A long line that moves slow. 1 person at the desk. And, in the back room, you can hear about 12 workers goofing off while the line grows longer and longer.

now that grim is an owner you will see more of those titles suggesting housing has stabilized.

”While the worst is over,…” why is the worst over? US is ready to default, NJ is ready to default, rates can only go up, houses are unaffordable due to stagnant salaries, unemployment, high taxes and demographics. You’ll be lucky if we have only a further nominal 20% around here in the next three years.

#47 I do not agree grim has shifted his stance. I would say he is neutral now, and simply purchased because he felt the time was right due to his own personal circumstances. I do agree with you however, in that the worst is not over. If one is buying today, they should view it simply as a long term rental without the hassles of moving potentially every couple of years. Housing is consumption, not investment.

34
If you think the post office covers all of its expenses by charging 34 cents per stamp, than your the idiot.
….

34 cents was mentioned nowhere. We were talking about privatization which has proven time and time again that doing so only increases costs and decreases quality. The Post Office is one of the few government agencies explicitly cited in the Constitution. Article I, Section 8, Clause 7 of the United States Constitution, known as the Postal Clause or the Postal Power, empowers Congress “To establish Post Offices and post Roads”. Who will be the lucky conglomerate to be handed this monopoly? Halliburton? How about Bank of America?

From Naomi Klein’s Shock Doctrin:
Klein contends that the primary reason why neither Iraq nor New Orleans has been rebuilt isn’t incompetence nor mismanagement, for the Bush administration did exactly what it always intended to do: destroy public and local institutions in favor of outside crony corporations. Iraq became the prime exemplar of the new faith: “the acceptable role of government in a corporatist state – to act as a conveyor belt for getting public money into private hands.” The resulting unrestricted corporate feeding frenzy in Iraq led to multiple subcontractors for each job – each taking a cut with the work left to cheap foreign labor using shoddy materials. “Corruption during the occupation was not the result of poor management but of a policy decision.” With most Iraqis left out, all tensions increased. Sectarian divisions “were far weaker” before this. When it comes to governance as well as economics, disaster capitalism doesn’t work, except for the favored few, creating what Klein calls “disaster apartheid.”

The same basic approach was taken in New Orleans after the disaster of Katrina provided opportunities. “The Bush administration refused to allow emergency funds to pay public sector salaries,” Klein writes, but it quickly instituted all 32 privatization policies devised by the Heritage Foundation (“ground zero for Friedmanism”), which had supplied many of the Americans in charge of the Iraqi occupation. Several contractors with no-bid contracts in New Orleans were the same heavy political contributors (some with financial ties to prominent officials) who received billions of federal dollars in Iraq.

But it had all come home even before that, Klein asserts, thanks to the constantly revived shock of 9/11 and specter of terrorism, which led to “a domestic form of economic shock therapy” in which “everything from war fighting to disaster response was a for-profit venture,” leading to “the creation of the disaster capitalism complex – a full-fledged new economy in homeland security, privatized war and disaster reconstruction tasked with nothing less than building and running a privatized security state, both at home and abroad.” As Friedman wrote, “only a crisis – actual or perceived – produces real change.”

It’s not just Republicans, Clinton did just as much damage. We are here today on the blog because Clinton dismantled Glass/Steagall deregulating the banks – fueling the Dotcom bubble, then the Housing Bubble – and he also deregulated the media with his Telecommunications Act of 1996 allowing for Burlusconi-esqu media consolidation, which is why you know none of this.

Anyone championing this abuse of yours and my tax dollars are exactly what I said before, useful idiots.

It is illegal for ANYONE to deliver first class mail but USPS. It is a serious crime for anyone other than the USPS to put anything in a person’s mail box and the USPS will enforce that law.

“technically illegal” is email and fax. Many people don’t realize it is illegal to send an email or a fax to another person. You are delivering mail. That is technically illegal as the USPS does not enforce that. USPS should enforce that rule. Screw Steve Jobs and the horse he rode in on.

joyce says:
July 27, 2011 at 12:41 pm

42
I might be wrong but I believe UPS, Fedex, are technically not allowed to offer traditional “first class mail”

Yea like kinda pregant, in for a penny in for a dollar.
3b says:
July 27, 2011 at 12:57 pm

#47 I do not agree grim has shifted his stance. I would say he is neutral now, and simply purchased because he felt the time was right due to his own personal circumstances. I do agree with you however, in that the worst is not over. If one is buying today, they should view it simply as a long term rental without the hassles of moving potentially every couple of years. Housing is consumption, not investment.

You say “I would say he is neutral now”, which means that grim has changed his views.

Also, a house can be both a consumption and an investment but I don’t care if you buy or decide to spend a fortune on it and am not asking for excuses why you did or will do so. However, given the present circumstances one has only to loose (in cash terms) and it is opportunistic to suggest otherwise.

Housing can be an investment. My past 2 landlords have made a living out of swooping in buying a series of run down homes, fixing them up to be livable, and renting them out. My 1st landlord, owned 5 homes and after 15 years, had them fully paid off. Now, he brings in about 10k in revenue each month from those homes. Obviously, at bubble prices, it made no sense to buy a home if you can’t rent it out for more than you will pay. I did see some investors in Trenton swooping up foreclosed properties at $20k with the full intention of renting them out. Personally, I think it takes a special breed of person to pull off the landlord business. Dealing with deadbeat renters and constant maintenance would be much more of a headache than I could handle.

don’t get me wrong. depending on how ruthless you are, you stand to make money under any pricing. Some managed to have a positive cash flow with properties purchased at bubble peak. Many would have a positive flow with foreclosures. In general it takes 12x-14x to make sense buying for renting and we are nowhere there yet as rent is much cheaper in NJ. However, this multiple should get lower if they stop spending our tax dollars to subsidizing landlords.

I’ve long since stated that my estimate of when the bottom of the market would be reached was when public sentiment was at it’s lowest point.

This isn’t revelation, this is plain ol’ contrarian thinking. Joe 6 Pack will always be either wrong or late to the party. I will not underestimate the stupidity and gullibility of the American public. Granted, you don’t want to be in a position to try and ride out the trend wrong, but we’re not talking equities here.

3b said in reference to grim, “he felt the time was right due to his own personal circumstances. ”
–

Newsflash, that’s why everyone purchases. Everybody “feels it’s the right time due to their own personal circumstances”. Grim is not unique at all, he’s like all the buyers out there scooping up the deals to be had.

It’s a great time to buy and stop making excuses as to it being ‘okay’ for Grim to buy and you all branding and labeling as ‘fools’ others that do. Most of you lack the character and courage to be consistent. You’re a collection of malcontents unable to accept the fact that people as smart as you all, and even smarter, recognize it’s a great time to buy and do so.

Grim well illustrates most of your are dopes, plain and simple. You want it both ways. You ridicule and mock as stupid, people that make the same choice for themselves as grim did – you’re not consistent, but I get it. Grim’s created a daily circle jerk of malcontents – while others are out doing something productive – you all bitch and complain beating the same singular one note beat.

#53 Well I said neutral as in he does not have a strong opinion one way or the other. However, as noted in #56, he believes housing has stabilized; I don’t subscribe to that belief. I believe we may have paused before the next leg down.

Be that as it may, I have to do buy myself within the next year. However, what I really should do, is go back to NYC, buy a 2 family house, get the rental income, and buy myself a place down the shore. In fact who knows maybe that is what I will end up doing any how.

#60 jets12 When you acknowledge your stupid comment about prices being up 26% in River Edge in the psat year, than we may start to care as to what you think. How could any one take anything you say seriously after making that comment. And stop with that it is a great time to buy nonsense, It may be better than it was over the last few years, but it certainly is not a great time to buy for a lot of reasons. Oh and using that term makes you sound like some Realtor named Candy or Bobbi with an I. Bu than again maybe you are.

By the way prices in River Edge??? Their going down, down, down, Their going down down, down, down!

Interesting that no one has mentioned “Not Raising the Debt Limit”, but rather “Cutting Spending within the existing Cap”? That say’s legions about both sides lying. Cutting Trillions, while raising the Debt Limit Trillions, is Voodoo Economics. You are not cutting anything for real, rather are still kicking the can down the road.

I admit that I stocked up on forever stamps a few years back, probably bought about 200 or so. But with everything becoming electronic, it will take me another few years to use them up. Good for Xmas cards, I guess.

Can anyone hazard a guess of what the gross and net rental yield would be on a average quality single family home in a middle class town in NJ? By net, I mean to say after property taxes and some routine upkeep, but not including financing costs.
Rental yields are a decent barometer of home pricing equilibrium.

“The National Association of REALTORS® is reaching out to home owners around the country to make them aware of a costly new rule called Qualified Residential Mortgage. This new rule is being considered right now in Washington, D.C. If the proposal goes through, it will require home buyers to make at least a 20% down payment on a home purchase. If you are a homeowner wanting to sell in the future, a 20% down payment requirement will mean fewer buyers for your home, which means lower home values.

The federal regulators have taken a new law passed by Congress intended for banks to do a better job of securing loans and instead are trying to turn the rule into a penalty on home buyers.

Send a Message to Washington Now

, we felt that you as a future buyer or seller needed to know this information. It’s a fact: many hard-working, credit worthy Americans have a difficult time saving for the down payment to buy a home. If enacted, the new regulation will make it even more difficult for many Americans to buy their next or first homes.

Send a Message to Washington Now

What can you do? Join us and take action now. Regulators in Washington need to hear the voices of home owners as they make their policy considerations. This is why your input is so important. Please send a letter to the U.S. Dept. of Housing and Urban Development (HUD) to ask that they drop the proposed 20% down payment requirement. Taking action is easy and takes just a few seconds of your time. We have already drafted the letter for you and you can add your own comments as well.

Send a Message to Washington Now

Thank you! We hope you will join us in our ongoing efforts to help current and future home owners around the country protect your private property rights by keeping up on laws that impact the most important investment you will make.”

70. A West
on a three bedroom, say 2,000 sq ft or so….with an average prop tax bill of 13k…lawns and up keep for the year another 1k conservatively and the unexpected, assuming the appliances are newish, I would kick in another 1k conservatively for unexpected repairs. 15k in expenses. Figure on 2,000 max in rent. About 750 cleared.

That’s commercial. You raised residential mail, which connotes communication. If you are mailing tangibles, then it is a lower-cost option, though I question how much lower as I used to be with firms that were volume users, so they got breaks on Fedex/UPS.

For my part, deliverables are information, and with e-filing (required in many courts), I have little need to mail large packages.

Not looking forward to loosing USPS, but I don’t expect to keep it around, and don’t care to pay for it thru taxes.

Interesting debate in one of my linkedin threads on the McKinsey study on employer sponsored insurance (ESI). Recall I said I was shocked by the number, that I hadn’t thought it would be that high. You, of course, dismissed it out of hand.

The EB community has been dissecting McKinsey and they are largely critical of it, notably because McKinsey won’t release methodology. But they also don’t think much of studies that show only a marginal effect on ESI as a result of PPACA.

A few folks (like me) think that the truth will lie somewhere in the middle. Also, some (like me) think that larger employers will be much less likely than smaller ones to drop ESI.

My prediction? I would expect 15- 20% drop rate from small and mid-sized businesses that offer ESI, and almost nothing from larger ones.

If the US defaults this week I doubt anyone will notice, Holmes five year deal with the Jets today was more of a discussion point. Plus Only white, indians and chinese people have money anyhow. the rest of people what difference does it make.

“The optimal top tax rate pi* is the tax rate that maximizes tax revenue from top bracket
taxpayers.6 Since the goal of the marginal rates on very high incomes is to get revenue in
order to hold down taxes on lower earners, this equation does not depend on the total
revenue needs of the government. Any top tax rate above pi* would be (second-best)
Pareto inefficient as reducing tax rates at the top would both increase tax revenue and the
welfare of top earners.”

Get that? The goal of this scheme is to reduce taxes for the lower incomes, and is not dependent on government needs. And yes, they justify it through the tired device of marginal utility theory, which says “we need it more than you so it is just to take it.”

Someday I want to hold up a bank and justify my action by quoting marginal utility theory.

# I agree. With all due respect to grim, I certainly cannot see housing as having stabilized; it is merely a pause in my opinion. I am seeing bigger price drops in the last few months than I saw all last year. And the Spring selling season is over, and there is still tons of rotten festering inventory out there.

Or could it be 40 years ago a couple saving for their first home had one used American Car, no cable, no internet, no cell phones, no IPODS, IPADs, did not go out to dinner or movies, brown bagged lunch, skipped vacations, no AC or Dryer, put hand me down clothes on kids, Dads had second jobs and as such was able to save a large % of salary. Imagine how quickly a couple could save 20% down if they had 2011 salaries and lived like it was 1971?

homeboken says:
July 27, 2011 at 4:55 pm

“It’s a fact: many hard-working, credit worthy Americans have a difficult time saving for the down payment to buy a home.”

Or taken another way – Homes are too expensive for many hard working americans to afford.

Comrade (89),
This guy sounds like the perfect candidate for the modern Fed – he’ll be like the surf & turf platter for the left. Take the income of the most economically productive via taxes, take their savings via currency debasement.

Modern economics has proven that money is worth more to bums than to people who work. Theoretically, it’s also worth more to people who live in the present rather than long term. Which is why the government likes to transfer money from savers to spenders.

So those union ads claiming that the USPS costs the taxpayer nothing are lies. Unless of course, you believe that the union is right and the USPS Inspector General is full of it.
….
<blockquote cite="• Although the Postal Service Fund is technically not included in the budget the
president sends to Congress each year, it is included in a broad economic
concept called the “unified federal budget” that captures all government
transactions with the public.
• Both the Office of Management and Budget (OMB) and the Congressional
Budget Office (CBO) concentrate their attention on scoring changes to the unified
federal budget, primarily because it allows large surpluses in the Social Security
Trust Funds to offset deficit spending elsewhere in government. The Postal
Service is an inadvertent victim of this strategy.

The Postal Service takes pride in running a business that generates its own revenue
and does not depend on taxpayer support. More than 25 years ago, the Postal Service
stopped asking for the public service subsidies to which it is entitled.1 In the Omnibus Budget Reconciliation Act of 1989, it won a hard-fought legislative battle and was placed off budget by law.

Yet today the Postal Service finds that its proposed legislative changes with financial
impact are stymied by budget scoring decisions of CBO. In addition, restrictions in annual appropriations bills prevent it from closing uneconomic post offices or
experimenting with 5-day–a-week delivery, and its financial position is eroded by a budget scoring-driven requirement to send more than $5 billion each year to the U.S. Treasury. “>
However, USPS is not allowed to use the surplus in that escrow account to pay operating costs.
<blockquote cite="By the end of FY 2005, the Postal Service had reduced to zero its debt to the Federal Financing Bank in the Treasury. As noted above, in FY 2006, P.L. 108-18 required the Postal Service to pay the “saved” amount into an escrow account for Congress to later determine how the funds would be used. The funds were to be unavailable to the Postal Service while in escrow. CBO estimated that the escrow would cost the Postal Service (and therefore the mailing public) nearly $3 billion in FY 2006 and $36 billion over the next 8 years.
The recognition that this was not a sustainable situation helped focus attention on postal reform legislation, which was given further impetus by the June 2003 report of the President’s Commission on the United States Postal Service. The House and Senate held 13 hearings on postal reform between 2003 and 2006. Senator Susan Collins, Chair of the Senate Governmental Affairs Committee, observed at one hearing that “two issues … united every single witness who has testified before our committee at these six previous hearings … a desire to see the escrow account repealed and the return of the military pension obligation to the Treasury Department.” Postal reform legislation was well received in Congress. Bills that would have removed the escrow requirement and returned the military service obligation to the Treasury (and reformed many other aspects of postal affairs) cleared the House Committee on Government Reform and the Senate Committee on Governmental Affairs by votes of 40-0 and 17-0 respectively in 2004, but they died at the end of the year because the Administration circulated a white paper asserting that the bills would have an adverse impact on the budget. The Administration required that any postal reform legislation must be budget neutral.

The Postal Service filed for a 5.4 percent rate increase with the Postal Rate
Commission in April 2005 — an increase the Postmaster General said would not be necessary if Congress would act to allow the Postal Service to use the escrow fund for operational expenses. Congress did not act, however, and the rate increase went into effect in January 2006, assuring that the escrow payments would continue to be made and the escrow fund would continue to grow.

Postal reform legislation was introduced again in the 109th Congress and initially
regained the momentum it had had the previous year. H.R. 22, the House bill, cleared
the Government Reform Committee on a 39-0 vote in April, 2005. On the day it was
brought to the floor of the House, however, the Administration issued a Statement of
Administration Policy threatening a veto. “>http://www.uspsoig.gov/foia_files/ESS-WP-09-001.pdf

So, which private firm should we allow to get their hands on that escrow account?

250K these guys are very very good…least expensive? IDK, but they know their stuff…drawback is that it is in Westchester and CThttp://www.bestplg.com/

250k says:
July 27, 2011 at 11:06 am
Anyone have any good sites with images for designing a very functional hotel-like master bathroom? I have found lots of sites with tiny little pix that label what tile, shower attachments, vanities, materials are being used and I have found sites with large photos but no listing of the elements used. There has to be something better out there. I am going for a design that will make the bathroom feel like you are on vacation at a luxury hotel/spa but that is also very functional (e.g. storage) so it can’t be too contemporary cause this might be beautiful, but where are you going to put all your cr*p?

#83 Nom
And I still dismiss it. Its nice to see, but not a suprise that the EB people coming to the same conclusion.

The biggest hurdle that McKinsey report had to get over was the fact that in the decade leading up to PPACA the average cost of healthcare plans had doubled and by 2008 were taking up 30% of compensation costs. Add in GWB backing the economy into a brick wall and you get a better indication why a company would look to drop ESI.

Bigger companies get a slightly easier ride as they can self-insure and use market forces and leverage to negotiate better rates with the insurers. They also get to define the benefits (outside of federal and state rules) and the amount they have the employee pick up directly. Small to mid size unless they can get into a good co-op pool are put over a chair by the insureres who are theselves fighting the battle with the providers to provide shareholder value.

There are an awful lot of Walmart greeters who only took the job so that they can get the benefits and the plan takes close to 100% of their wage. On the otherside you have 95% of healthcare spending done by 5% of the population. with a massive industry of medical billing thats whole purpose is to work out who owes who.

Overall healthcare in this country is one big clusterfcuk in serious need of reform, but hey that would be Soc1alist.

On the healthcare debate, one company in MN works with employers who give employees a flat amount in their paycheck to purchase health insurance. The employees also get a lot of data regarding various treatment costs and they are empowered if you will to shop for care with cost information in hand. There are also some initiatives going on to reduce what are typically significantly higher out of network costs.

There is another late stage startup out of CA that is working with large employers (I believe Safeway was their initial client) and the company is building a database with cost information on various healthcare procedures. A baseline price for procedures is established and then it is up to the patient if they want a provider who provides services at a cost above the baseline (employee pays the difference) or if they receive services at a cost below the baseline (some type of gain share for employee and employer).

All the above adds transparency to the system although I would be concerned as to what this does to the quality.

Right now, it seems like the health insurance companies are making the most money of all the participants in the healthcare industry.

The medicare/caid shenanigans are one of the big problems with healthcare cost. The government essentially forces a cost shift onto the non-medicare/caid patients. The problem is bigger then medicare/medicaid but the system will not be fixed until that massive cost shifting is dealt with.

Now here’s a dream job. An advertisement has appeared on the UK version of Craigslist looking for female web coders who are prepared to work in the nu-de.

Chris Taylor of Nu-de House says he’s a naturist himself, and that the office is warm and private – and great fun. Customers never meet the staff, he promises, and won’t know they’re in their birthday suits.
snip

But there is just one more thing that applicants apparently need for the job – bre@sts.

Taylor is remarkably unabashed about the stipulation, which he seems to think is perfectly normal. “It’s because they’ll be working for me in my house, and I want females,” he told TG Daily. “I don’t want to look at men.”
snip

Well written article, I do however, have one small question. For a site called “Capitalism” should the recomendation should still have been to invest instead of save? Even if that is to invest in yourself to get out of debt. If you are out of debt then while the stock market may have been out of bounds, there would have been laissez-faire somewere in the world for you to jump into.
In Lassze Faire, only Suze Orman does TIPS.

Count me in on this scheme. I volunteer to write the announcement to the people in the bank, provide flashbang grenades, provide sidearms to all the robbers in our gang and donate one faulty RPG launcher to the cause.

Here’s my first draft of the announcement to be made in the bank:

“Gimme all the money, lardass. And, don’t hit the silent alarm.”

“Someday I want to hold up a bank and justify my action by quoting marginal utility theory.”

Bank of America Donates Then Demolishes Houses to Get Rid of Foreclosures
Bank of America Corp. (BAC), faced with a glut of foreclosed and abandoned houses it can’t sell, has a new tool to get rid of the most decrepit ones: a bulldozer.
The biggest U.S. mortgage servicer will donate 100 foreclosed houses in the Cleveland area and in some cases contribute to their demolition in partnership with a local agency that manages blighted property…

Remember my buddy with the CO problems, well his luck is not improving.

To recap, he was selling a place he bought in 2002 and the inspector would not give him the CO due to a load of issues that were bypassed on the CO when he bought. Well he fixed the chimney ($5K), plumbing, electrical, etc, etc and made it to closing. He arranged with the buyer to rent for 2 months as the purchase of the new place was not going smoothy. Thats not the problem.
He was due to close on Monday. The sellers lawyer was on vacation last week so they were having problems getting a hold of someone to confirm the date, time and place for closing. So he decides to call the seller. The conversation went something like this.

Buyer (B) : so are we closing Monday
Seller (S) : yes, or course we are
B : thats good, because we have to confirm with the movers for the Tuesday move
S : What do you mean?
B: We have the movers coming Tuesday to pick up our stuff here and move us in.
S: But I won’t be out
B: What?
S: I’ll be moving Aug 1st
B: But were closing on the 25th
S: Oh the lawyers were working something out, I’ll be moving the 1st

So the story is, the seller is a builder that does not have a pot to pi$$ in, while he will be getting a check at closing, does not have the cash to pay movers and find a new place. I’m telling my friend to run, but he is holding on. At least his lawyer has pointed out that if he goes to close and needs to evict, it will take six months and a lot of costs.
The plan seems to be, they will run the numbers to confirm he will get cash at closing, there will be $10K released from the current escrow to get his stuff out by the 1st and into storage and/or a deposit on a new place.
I think this will all fall apart and my friend will wave the best part of $15-$20K goodbye. His view is that they 3 weeks of the current HyperStress / not sleeping at night will be balanced by the 15-20years they plan to be in this place.
I say good luck!

#127 Barbara
Thehis three weeks is the stress level has has had/having to get him to the Aug 1st closing. If this closing doesn’t happen or if he closes and has to evict, I don’t know how he will handle it.

The cherry on the cake is that tomorrow, a clause in rental agreement kicks in. The rent on his old place goes to $200/day. He is ok with this as by this point, Aug 2 the movers either move him into the new place or put his stuff into storage and he, wife and baby move into his brother in laws.

For me if I wanted the house, I would go the route of telling the seller that day of the close I will have the Sicillian version of 18oo Got Junk sitting outside the place for anything he has left there. As soon as his John Hanc0ck hits the paperwork, they will get a call to clean the place.

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Great review! You actually covered some interesting news on your blog. I came across it by using Google and I’ve got to admit that I already subscribed to the site, will be following you on my iphone :) btw Plase check my free ipad 2 blog, hope you will find interesting information about free ipad 2 there!

There are some interesting points in time in this article but I don’t know if I see all of them center to heart. There is some validity but I will take hold opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as well

There are some interesting points in time in this article but I don’t know if I see all of them center to heart. There is some validity but I will take hold opinion until I look into it further. Good article , thanks and we want more! Added to FeedBurner as well

Can I just say what a relief to find someone who actually knows what theyre talking about on the internet. You definitely know how to bring an issue to light and make it important. More people need to read this and understand this side of the story. I cant believe youre not more popular because you definitely have the gift.